June 27, 2023
Thinking of starting a new business in the retail industry? Well, you are at the right place. Local retailers can find it hard to get the same level of popularity as the nationwide brands have. Anyhow, small retail businesses have the majority in the US Retail market.
According to researchers, 98.6% of all retail businesses in 2019 were small (50 or fewer employees). It is therefore crucial that you understand to start a retail business before you can break into this burgeoning industry.
To assist you in your startup journey, we will walk you through all of the steps necessary to start a retail business.
Starting a retail storefront requires a lot of time and research. This is why we have curated a list of 5 steps to start your own business.
Establishing your niche market is the first step in starting a retail store. The number one mistake new business owners make is not focusing on these three factors when choosing a niche:
Profitability: Choose a niche that ensures a good return on your investment. This means finding products that aren't too costly to manufacture or purchase wholesale· If a product is too expensive to produce or ship, it might not be the best fit for an online store. Sometimes, such items are better suited for in-person sales.
Searchability: Stock products that people are actively searching for. For instance, if you want to sell almond chocolates, make sure "almond chocolates" is a keyword you target. Use SEO tools to discover what products are in demand. This helps attract customers who are already looking for what you offer.
Passion: Sell something you're passionate about. Think about what you love talking about or researching. When you care deeply about your products, you're more likely to persevere through challenges. Plus, your enthusiasm will be evident to customers, making them more likely to trust you as an expert and refer others to your store.
It is just as important to know your target audience as it is to know your niche. Make sure what you're selling is something they'll be interested in and that they can easily purchase. You shouldn't ask people who aren't your target audience for their opinions about your product.
Following the determination of your niche and target audience, you must decide on your product or service. This can be the hardest part of starting your online store. It's important to avoid selling a product that can't be produced or isn't in demand. You should also ensure that your products are accommodated with the necessary resources, such as storage and shipping.
Once you've decided what to sell, the next step is to choose your brand or business name and create your brand assets, like your logo. This process can be straightforward for some but challenging for others. A helpful tip is to visit a domain name registrar like GoDaddy to check for available domains. Ideally, your domain name should match your business name to ensure consistency.
If you're unsure where to start with creating your logo, Canva is an excellent resource. It offers many free, customisable logo templates that are easy to use. If designing a logo yourself isn’t appealing, you can hire a professional from platforms like Fiverr or 99Designs to create one for you.
To process payments for your chain store, you'll need an Employer Identification Number (EIN). To obtain an EIN, you must register your online store as a business in your state. While you have the option to register as a sole proprietorship or corporation, many small retail businesses opt for a Limited Liability Company (LLC). An LLC can help protect your assets if your company faces legal issues.
There are also tax benefits to forming an LLC, so consult your tax advisor to determine if this is the best option for you. The registration process varies by state, so check with your state's Secretary of State for specific instructions. Alternatively, you can use a business registration service like LegalZoom or ZenBusiness to simplify the process.
The most famous marketing model to follow in the retail business is the 4 P's of Marketing by Philp Kotler. The 4 P's of Marketing includes:
In the above, we have discussed selecting the product line and its placement. But the 2 factors that matter the most in marketing are the price and packaging of the product. The price of a product can only be indicated once all of the other 3 p's are done correctly. Let's discuss the remaining 2 p's of marketing.
A product's packaging is crucial to its success. Packaging is considered to be the most important part of the product as it plays a crucial role in marketing your product and attracting customers. Ever gone to a mart? What helps you to decide whether to buy the desired product or not? It's packaging. Plus, packaging solutions like custom made display boxes also help in boosting sales and gaining the attention of customers. One cant simply ignore the products that pop on display on every cash counter of a mart! And it gives an urge to your customer to purchase your product.
Now when you're done with all the other things, the one thing that matters most to become a retailer is setting the price of the product. You will have to analyse how much it costs you, and how much your competitors are selling it for. And if you want your product to be a success, then you have to give them a price that can compete with your competitors.
Opening a retail business is not as easy as it seems, sure it has many challenges, but if done correctly, you can easily compete in any market. The above guide gives you an insight into how you can easily become a retail business owner. You can also take the help of a business consultant to get some storefront business ideas to start your own retail business.
